CFPB Announces $3.2 Million Settlement with Online Payday Lender

On January 25, 2019, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into a consent order with an online lender that extends unsecured payday and installment loans, as well as lines of credit, resolving allegations that the lender had engaged in unfair acts or practices in violation of the Consumer Financial Protection Act (CFPA), 12 U.S.C. §§ 5531, 5536.

The consent order alleges that although the consumers had authorized the lender to debit their bank accounts, the lender instead debited different bank accounts without authorization by updating consumers’ bank account numbers with more recent information the lender purchased from lead aggregators.  The consent order also alleges that the lender failed to honor loan extensions it had provided to consumers because of a coding error that it did not to resolve in a timely manner.

Per the consent order, the payday lender will pay a $3.2 million civil money penalty to the CFPB.  The lender is also subject to injunctive relief prohibiting its alleged conduct.

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